Pipeline Abandonment. Do Your Due Diligence.
Asset Retirement Obligation Series
Want To Save Millions?
Pipeline abandonment can be one of the easiest stages of the decommissioning process. In most cases, pipelines can be abandoned in place, and the project completed from a diving support vessel (DSV). However, the most important action in pipeline decommissioning comes well before any mobilization of equipment, divers or vessels have started.
At the beginning of this series we discussed how important due diligence can be to understanding your asset retirement obligations. A key part of the due diligence process is reviewing all historic documentation associated with an asset. This is especially important with pipelines.
Just like platforms, pipelines are bought and sold. Many times a platform’s owner/operator does not have legal responsibility for pipelines associated with their asset.
To determine who has responsibility for pipeline decommissioning, contact the regulatory authority in your region. In the Gulf of Mexico, that is likely to be the Texas Railroad Commission or the Louisiana Department of Natural Resources. If it turns out that you are not legally responsible for the pipeline, decommissioning of that pipeline is also not your responsibility.
TSB Investigation Saved Operator $4.2 Million
Recently, TSB was brought in to manage a pipeline decommissioning project for an operator who had been paying the pipeline easement for 10+ years. It would seem logical that they would have pipeline responsibility, right? Think again!
When an outside survey was done it turned out the pipeline belonged to a different owner. Upon further investigation with the regulating authority, it was confirmed that the pipeline ownership had been transferred. This investigation saved the operator $4.2 million! Lesson learned – don’t skip your due diligence!
When the responsibility for a pipeline is yours, you’ll find the steps to pipeline decommissioning are generally straightforward. Avoid a crisis and review our Plan Your Decommissioning Project Now steps.